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Question 1 of 10
1. Question
Identify the Bank definition of cash management:
Correct
Bank definition of cash management
– products and services banks sell to cash managers
– comparison of the corporate and bank definitions of cash managementIncorrect
Bank definition of cash management
– products and services banks sell to cash managers
– comparison of the corporate and bank definitions of cash management -
Question 2 of 10
2. Question
Select TWO major factors that influence the structure of the cash management function?
Correct
Major factors that influence the structure of the cash management function
size of the company industry nature of the businessIncorrect
Major factors that influence the structure of the cash management function
size of the company industry nature of the business -
Question 3 of 10
3. Question
Which statement best describes the term CASH?
Correct
Amounts held either physically in notes and coin, or held in bank accounts. Cash can be positive (surplus balances in a bank account) or negative (deficit bank account balances).
Incorrect
Amounts held either physically in notes and coin, or held in bank accounts. Cash can be positive (surplus balances in a bank account) or negative (deficit bank account balances).
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Question 4 of 10
4. Question
Which statement best describes the liquidity of a company?
Correct
A company’s ability to pay its obligations when they fall due. To ensure liquidity a company must maintain sufficient funds and have access to unused borrowing facilities.
Incorrect
A company’s ability to pay its obligations when they fall due. To ensure liquidity a company must maintain sufficient funds and have access to unused borrowing facilities.
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Question 5 of 10
5. Question
A company that holds minimal cash can remain liquid as long as:
Correct
A company that holds minimal cash can remain liquid as long as it has continuing access to borrowings
Incorrect
A company that holds minimal cash can remain liquid as long as it has continuing access to borrowings
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Question 6 of 10
6. Question
Select more than one answer:
Identify Internal resources of liquidity among them:Correct
Internal sources of liquidity include:
• pools of cash in the company (if these pools are in different currencies or geographically dispersed, it may be difficult to use these funds effectively)
• ongoing operations and sales receipts
• selling the company’s liquid assets
• improving collection methods
• reducing petty cash on hand and using other payment methodsIncorrect
Internal sources of liquidity include:
• pools of cash in the company (if these pools are in different currencies or geographically dispersed, it may be difficult to use these funds effectively)
• ongoing operations and sales receipts
• selling the company’s liquid assets
• improving collection methods
• reducing petty cash on hand and using other payment methods -
Question 7 of 10
7. Question
Select TWO ways for generating External sources of liquidity:
Correct
External sources of liquidity can be generated from:
• increased bank borrowing
• borrowing from the commercial paper (or similar short‐term capital) market • providing trade discounts to customers for early payment
• accelerating receipts from customers
• extending payment terms to suppliersIncorrect
External sources of liquidity can be generated from:
• increased bank borrowing
• borrowing from the commercial paper (or similar short‐term capital) market • providing trade discounts to customers for early payment
• accelerating receipts from customers
• extending payment terms to suppliers -
Question 8 of 10
8. Question
A liquid asset is one that can be quickly and easily converted into:
Correct
A liquid asset is one that can be quickly and easily converted into cash without significant loss of value.
Incorrect
A liquid asset is one that can be quickly and easily converted into cash without significant loss of value.
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Question 9 of 10
9. Question
Which statement best describes the term ‘Value’ in Cash Management concepts:
Correct
Value is the moment when funds cease to be usable to the originating party or when they become usable funds to the beneficiary in the sense that they can be used to reduce overdraft balances or earn interest.
Incorrect
Value is the moment when funds cease to be usable to the originating party or when they become usable funds to the beneficiary in the sense that they can be used to reduce overdraft balances or earn interest.
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Question 10 of 10
10. Question
A compensation mechanism used by banks where debits to a customer’s statement of account reflect a date prior to the actual outflow of funds refers to:
Correct
BACK VALUE‐DATING
A compensation mechanism used by banks where debits to a customer’s statement of account reflect a date prior to the actual outflow of funds.Incorrect
BACK VALUE‐DATING
A compensation mechanism used by banks where debits to a customer’s statement of account reflect a date prior to the actual outflow of funds.